Abstract
India has plenty of energy resources for meeting its electricity demand and scaling up capacity addition. Energy production and its consumption from coal, gas and liquid fuel accounts for roughly two-third of the total power generated. Various factors govern in decision for strategic investments on energy projects based on coal, gas and liquid fuel consumption. Increasing recurring cost and environmental factors are the major concern for energy projects. Therefore, investments on energy projects need to be optimized. The traditional method of net present value (NPV) for evaluating projects investment decisions and capturing opportunity in conflicting environments is becoming quite unreliable. This may impact achieving national gross domestic product of the country. Of recent time, life cycle management based life cycle costing (LCC) approach to evaluate energy projects the LCC is emerged from United Nation’s global environmental agenda of sustainable consumption and production. This paper is an attempt to address investment issues using LCC approach for deployment of coal based project. The paper also utilizes Real Options Analysis (RoA) theory. Finally, the paper integrates LCC and RoA in energy and power sector to address the investment issues and thus support UN mandate for sustainable development in emerging economies like India.
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